Eighth deferred prosecution agreement approved

The UK’s eighth deferred prosecution agreement (DPA) has been approved, concluding an investigation commenced by the UK Serious Fraud Office (SFO) in 2013.

The settlement with G4S Care & Justice (UK) Ltd (G4S), a wholly-owned subsidiary of G4S plc, contains certain features which stand out from other DPAs:

• a discount of 40% rather than 50% was applied to the fine given the “late in the day” cooperation;
• more significantly, an external and independent “Reviewer” will be appointed, through a process similar to that used in the United States for the appointment of Monitors, to provide what the Director of the SFO referred to as "unprecedented, multi-year scrutiny and assurance."

The publication of the Statement of Facts will be postponed.

G4S will pay a financial penalty of £38,513,277, which represents a 40% discount to what the fine otherwise would have been, as well as the SFO’s costs of £5,952,711.

The company has also committed to a full programme of ongoing compliance remediation. Giving judgment, Davis J found that whilst cooperation by G4S with the SFO’s investigation had been "less than full" at times, a DPA was nonetheless in the interests of justice particularly in view of the “root and branch self-cleaning process” which G4S had committed to. This, he said, would “protect the public in the longer term in a manner more effective than any prosecution could expect to achieve.”

Davis J noted that the remedial steps which have been and will be taken “only can be enforced under the aegis of a DPA” rather than through prosecution and conviction of G4S and that therefore “[t]he public interest in the remedial steps is very high.”

The appointment of an external and independent “Reviewer” will provide a level of scrutiny not seen in any previous DPA and appears to be, in all but name, a US-style monitor.

Davis J concluded that the discount should be greater than the one-third starting point, “because of the overall level of cooperation and the unusually wide scope of the self-cleaning steps taken by G4S” but less than the 50% discount seen in all other DPAs excepting the first, because “full cooperation with the SFO investigation came relatively late in the day.”